Case Number: BC484055 Hearing Date: June 14, 2018 Dept: 50

Superior Court of California

County of Los Angeles

Department 50

james demetriades,

Plaintiff,

vs.

YELP, INC., et al.,

Defendants.

Case No.:

BC 484055

Hearing Date:

June 14, 2018

Hearing Time:

8:30 a.m.

[TENTATIVE] ORDER RE:

YELP INC.’S MOTION FOR RENEWED SUMMARY JUDGMENT OR, IN THE ALTERNATIVE FOR SUMMARY ADJUDICATION;

YELP INC.’S APPLICATION TO FILE HIGHLY CONFIDENTIAL INFORMATION UNDER SEAL

Background

James Demetriades (“Demetriades”) filed this action on May 3, 2012 against Defendant Yelp, Inc. (“Yelp”) seeking injunctive relief pursuant to Business and Professions Code sections 17200 and 17500 et seq. Multiversal Enterprises-Mammoth Properties, LLC (“Multiversal”) substituted in as plaintiff on February 25, 2015.

The Court previously denied a motion for summary judgment, or in the alternative, summary adjudication by Yelp, partly on the basis that Yelp had failed to establish that injunctive relief was unavailable as a matter of law.

Yelp now renews its summary judgment/summary adjudication motion on the grounds that Multiversal cannot obtain the requested injunctive relief as a matter of law and bases the renewal on the fact that Multiversal has identified, in written discovery responses, the specific injunction it is seeking in this matter, which constitutes new or different facts or circumstances. Multiversal opposes.

Application to File Under Seal

Yelp seeks to file its Renewed Motion for Summary Judgment, or in the Alternative, Summary Adjudication, its Separate Statement of Undisputed Material Facts in Support of Renewed Motion for Summary Judgment, or in the Alternative, for Summary Adjudication, the Declaration of Vince Sollitto, originally submitted in connection with Plaintiff Multiversal’s motion to compel the disclosure of Yelp’s source code, and transcripts of closed hearings under seal pursuant to California Rules of Court, rules 2.550 and 2.551. Yelp’s application is unopposed.

Generally, court records are presumed to be open unless confidentiality is required by law. (Cal. Rules of Court, Rule 2.550(c).) A court may order that a record be filed under seal “if it expressly finds facts that establish: (1) There exists an overriding interest that overcomes the right of public access to the record; (2) The overriding interest supports sealing the record; (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) The proposed sealing is narrowly tailored; and (5) No less restrictive means exist to achieve the overriding interest.” (Cal. Rules of Court, rule 2.550(d).)

Yelp contends that it has an overriding interest in the information that it seeks to redact from the public versions of the filed documents. In particular, Yelp asserts that its renewed motion, as well as the supporting evidence, contains confidential, nonpublic trade secret information about its recommendation software. (See NBC Subsidiary, Inc. v. Superior Court (1999) 20 Cal.4th 1178, 1208, 1223, fn. 46 [recognizing that courts have acknowledged that protection of trade secrets is an overriding interest].) Yelp also contends that disclosure of the confidential information would place Yelp at a severe and unfair competitive disadvantage with competitors and users who could use the information gleaned from the confidential information to undermine Yelp’s software. Finally, Yelp contends that the redactions in the papers are narrowly tailored and the least restrictive means to protect Yelp’s overriding interests.

The Court finds that Yelp has shown sufficient good cause for filing its renewed motion and the related documents under seal. Therefore, the application is granted. However, the Court notes that no additional or supplemental applications were filed with regard to the opposition to the renewed motion or the reply to the renewed motion. Since the information redacted in the opposition and reply papers are presumably the same as those redacted in the moving papers, the Court intends to grant any eventual applications to file those under seal. The Court directs the parties to submit supplemental declarations and/or briefs addressing the redactions in the opposition and reply at the hearing on this matter.

Renewed Motion for Summary Judgment/Summary Adjudication

Evidentiary Objections

The Court overrules Multiversal’s objections to the Declaration of Nicolas A. Jampol.

Request for Judicial Notice

Multiversal’s unopposed request for judicial notice is granted.

Legal Standard

“[A] motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c (c).) The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) If the moving party carries this burden, the burden shifts to the opposing party to make a prima facie showing that a triable issue of material fact exists. (Ibid.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

When a defendant seeks summary judgment, he/she must show either (1) that one or more elements of the cause of action cannot be established; or (2) that there is a complete defense to that cause of action. (Code Civ. Proc., § 437c(p)(2).)

Discussion

Background Facts

In the operative First Amended Complaint (“FAC”), Multiversal asserts a cause of action for unfair, unlawful, or fraudulent business act or practices (the Unfair Competition Law (“UCL”); Business & Professions Code section 17200 et seq.)) and for false advertising (Business & Professions Code section 17500 et seq.). Multiversal identifies five statements (the “Challenged Statements”) as the basis of its false advertising and unlawful competition claims. (FAC, ¶ 9.) Four of the five statements were made in a video released by Yelp in 2010 (the “2010 Video”). The fifth statement was made in Yelp’s “About Us” webpage. (Jampol Decl., Ex. F [Sollitto Decl.] ¶ 7.)

In response to Yelp’s interrogatory asking Multiversal to “[s]tate the specific injunction YOU seek in this ACTION,” Multiversal listed the following[1]: 1) enjoining the Challenged Statements (comprising the 2010 Video and subparagraphs a-f, o-q, and t), 2) enjoining the New Statements (comprising subparagraphs g-n and r-s), 3) corrective advertising, and 4) destruction of the 2010 Video. (Jampol Decl., Ex. K.)

Renewed Summary Judgment by Way of Newly Discovered Facts or Circumstances (CCP § 437c(f)(2))

Yelp moves to renew its summary judgment motion pursuant to Code of Civil Procedure section 437c(f)(2), which provides that a party may file a renewed motion as to a previously decided issue where there are “newly discovered facts or circumstances or a change of law supporting the issues reasserted in the summary judgment motion.” (Code of Civil Procedure section 437c(f)(2).) Yelp contends that Multiversal’s identification of the specific injunction it is seeking in this case, which identification was not provided prior to the first summary judgment motion, is a new fact or circumstance. (Yelp’s Separate Statement of Undisputed Material Facts (“UMF”) 9.) Multiversal, on the other hand, contends that the discovery response is not a new fact but rather, the articulation of the remedy it is seeking. Whether or not this is a “new fact,” the Court finds that the provision of the discovery response identifying the specific injunction being sought by Multiversal is sufficient to constitute a newly discovered “circumstance.” The Court also notes, in particular, that its denial of Yelp’s first summary judgment motion was partly based on the fact that Multiversal’s prayer for relief in the operative First Amended Complaint is broadly drawn[2], and so Yelp’s submission of evidence that it had not published what the parties referred to as the “Challenged Statements” since November 2013 and that Yelp had no intention of publishing the “Challenged Statements” again was insufficient to entitle Yelp to summary judgment. Now that Multiversal has elaborated on the specific injunction it is seeking, the Court finds that it is appropriate for Yelp to attempt to either completely resolve or further narrow the issues prior to trial.

Law of the Case Doctrine

Among the different arguments proffered by Multiversal in opposing Yelp’s renewed motion is the argument that the law of the case doctrine prevents Yelp from challenging Multiversal’s attempt to enjoin past conduct. According to Multiversal, when Yelp’s anti-SLAPP motion was appealed, Yelp argued that the appeal and the action were moot because Yelp had taken down the 2010 Video. When the Court of Appeal reversed the granting of the anti-SLAPP motion and remanded the matter back to the trial court, it “implicitly found that this matter was not moot.” (Opp’n, p. 13: 17-20.) Multiversal contends that this conclusively establishes the rule pursuant to law of the case. (See Yu v. Signet Bank/Virginia (2002) 103 Cal.App.4th 298, 309 [“Under the law of the case doctrine, ‘ ‘the decision of an appellate court, stating a rule of law necessary to the decision of the case, conclusively establishes that rule and makes it determinative of the rights of the same parties in any subsequent retrial or appeal in the same case.”] [disapproved on other grounds].) However, as noted by Yelp, the Court of Appeal made no ruling about the availability of injunctive relief or mootness. (See generally Demetriades v. Yelp, Inc. (2014) 228 Cal.App.4th 294.) Therefore, the law of the case does not apply.

Standing

Yelp asserts that the New Statements are not pleaded in the FAC and that Multiversal failed to include the New Statements in its response to a written interrogatory seeking identification of all statements upon which Multiversal relied in deciding to advertise with Yelp. (See Jampol Decl., Ex. A.) As is well-settled, “[t]he pleadings delimit the issues to be considered on a motion for summary judgment.” (Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1253.) “Accordingly, the burden of a defendant moving for summary judgment only requires that he or she negate plaintiff’s theories of liability as alleged in the complaint….” (Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 493 (emphasis in original).) Moreover, Yelp contends that Multiversal does not have standing to seek relief based on the New Statements. To have standing, “a plaintiff ‘proceeding on a claim of misrepresentation as the basis of his or her UCL action must demonstrate actual reliance on the allegedly deceptive or misleading statements….’” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 326); see also id. at pp. 321-322 [same standing requirement for false advertising claims].)

In its opposition, Multiversal makes the argument that the Court has “extraordinarily broad” remedial power in fashioning appropriate relief, but it fails to recognize that the case to which it cites for this proposition was superseded by statute. (See Hewlett v. Squaw Valley Ski Corp. (1997) 54 Cal.App.4th 499, 540 (superseded by statute).) While “[i]t is true…that a court possesses broad power to fashion injunctive relief under the UCL, including the ability to restrict certain activities related to proven UCL violations[,]” “these broad equitable powers do not afford standing to persons otherwise not entitled to sue….” (Daro v. Superior Court (2007) 151 Cal.App.4th 1079, 1100 [discussing the fact that Hewlett predates Proposition 64, which amended the standing requirements for UCL actions].) Notwithstanding the limited applicability of Hewlett, Multiversal asserts that it may seek an injunction as to the New Statements because the New Statements mean the same thing as the Challenged Statements. In support of this contention, Multiversal submits evidence of a Consumer Survey conducted by its expert showing that the overall message conveyed by Yelp by the Challenged Statements is the same as the message conveyed by Yelp in the New Statements. This is so because the survey results showed that consumers held the same beliefs about Yelp after watching the 2013 Video as those consumers who watched the 2010 Video. (Multiversal’s Statement of Disputed Material Facts (“PDF”) 15; Opp’n, p. 15: 8-9.) Though not explicitly stated by Multiversal, the Court construes Multiversal’s argument here to mean that the New Statements are contained in the video released by Yelp in 2013 to replace the 2010 Video, which is currently on Yelp’s website (the “2013 Video”). (See PDF 15; UMF 4.) Therefore, Multiversal’s position is that regardless of whether the New Statements were alleged in the FAC or whether the New Statements were explicitly listed in its discovery responses, Multiversal has standing to seek an injunction that encompasses the New Statements.

In reply, Yelp contends that there is no evidence that the 2013 Video actually contains the Challenged Statements or that the statements in the 2013 Video are substantially similar to the 2010 Video. (See Reply pp. 12: 22 – 13: 3; Supp. Jampol Decl., ¶¶ 5-6, Exs. P, Q.) Multiversal does not dispute that the New Statements were not alleged in the FAC and that Multiversal listed only the Challenged Statements when asked to identify the statements upon which it relied in purchasing advertising from Yelp. It follows then that Multiversal could not have actually relied on the New Statements when it decided to purchase advertising from Yelp. Therefore, the Court finds that Multiversal does not have standing to seek relief based on the New Statements.

Adjudication Only Proper to Dispose of Entire Cause of Action

(CCP § 437c(f)(1))

This leads to Multiversal’s second procedural challenge to Yelp’s renewed motion. Multiversal argues that Yelp is improperly attempting to summarily adjudicate discrete issues within both causes of action, which if granted by the Court, would not dispose of the entire cause of action. (See Code Civ. Proc., § 437c(f)(1) [“A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.”].) Yelp contends that nevertheless, it may move for summary adjudication by “challenging a separate and distinct wrongful act even though combined with other wrongful acts alleged in the same cause of action.” (Lilienthal & Fowler v. Superior Court (1993) 12 Cal.App.4th 1848, 1854-1855; see also Edward Fineman Co. v. Superior Court (1998) 66 Cal.App.4th 1110, 1118 [approving Lilienthal]; but see Bagley v. TRW, Inc. (1999) 73 Cal.App.4th 1092, 1094, fn. 2 [questioning Lilienthal and noting that subsequent to Lilienthal, the statute was amended to provide that a motion for summary adjudication shall be granted only if it completely disposes of a cause of action].) According to Yelp, each of the Challenged Statements constitutes a separate alleged wrongful act that Multiversal could have pleaded as the basis for separate causes of action under the Unfair Competition Law or the false advertising law. Although Yelp only references the Challenged Statements in the Reply (p. 7: 14-17), Multiversal correctly notes that Yelp is seeking summary adjudication as to more than just the Challenged Statements. Yelp is seeking summary adjudication as to the New Statements, as well as to the issue of destruction of the 2010 Video and corrective advertising. The question presented, then, is whether Yelp may properly seek summary adjudication as to each of these four items because resolution of each separate item does not completely dispose of any cause of action.

The Court first addresses Issue No. 2, that Multiversal cannot enjoin the New Statements because it did not rely on such statements. Though the Court has found that Multiversal does not have standing to seek relief as to the New Statements, this issue, as framed by Yelp, is not amenable to summary adjudication because summary adjudication of this issue would still leave behind the Challenged Statements portion of each cause of action. Deciding Issue No. 2 would not entirely dispose of any cause of action, so summary adjudication is denied as to Issue No. 2.

Issue No. 1 is that Multiversal cannot enjoin the Challenged Statements because they constitute prior conduct and Multiversal has not provided evidence that such statements are likely to be repeated. The Court reiterates that summary judgment or adjudication may issue if the defendant shows that one or more elements of a cause of action cannot be established. (Code Civ. Proc., § 437c(p)(2).) Bearing that in mind, the Court finds that if Issue No. 1 were summarily adjudicated, the entire false advertising cause of action (and the entire UCL cause of action) would be disposed of, because entitlement to a specific form of relief is an element of the cause of action. (See Griffith v. Dept. of Public Works (1959) 52 Cal.2d 848, 853-854 [affirming summary judgment in favor of defendant because injunction “will not generally be issued to prohibit a completed act”]; see also Madrid v. Perot Systems Corp., supra, 130 Cal.App.4th at pp. 466-467 [affirming dismissal of UCL claim on demurrer for failure to present a “viable UCL claim” because there was no allegation that wrongful conduct was ongoing and likely to recur]; cf. Academy of Motion Picture Arts and Sciences v. GoDaddy.com, Inc. (C.D. Cal., Apr. 10, 2015, No. CV 10-03738-AB (CWX)) 2015 WL 12684340, at *5, *12 [noting summary judgment may be obtained by disproving an essential element of the opposing party’s claim and then granting summary judgment on UCL cause of action because UCL claim fails as a matter of law when injunctive relief is found to be moot]; cf. SourceAmerica v. SourceAmerica (S.D. Cal., May 14, 2018, No. CV 14-00751-GPC (AGS)) 2018 WL 2193261, at *6 [ruling on summary judgment that UCL claim fails as a matter of law because there was no entitlement to injunctive relief].) Therefore, Multiversal’s argument concerning Code of Civil Procedure section 437c(f)(1) is inapplicable to Issue No. 1, and the Court may summarily adjudicate Issue No. 1. Further, because the issue of corrective advertising and the issue of destruction of the 2010 Video (Issue Nos. 3 and 4, respectively) are part and parcel of the overall issue of injunctive relief against the Challenged Statements, the Court finds that these two issues would also dispose of the entire false advertising cause of action or the UCL cause of action. In light of the fact that Multiversal does not have standing to seek relief as to the New Statements, summary adjudication of Issue Nos. 1, 3, and 4 collapses into and becomes a summary judgment determination.

Yelp contends that it is entitled to summary judgment because Yelp has ceased publishing and disseminating the Challenged Statements and Multiversal cannot show that the publication or dissemination of the Challenged Statements is ongoing or likely to recur. Yelp submits that it has not made the Challenged Statements in over four years and offers a sworn declaration from a senior vice president (Vince Sollitto) unequivocally stating that Yelp will not republish the 2010 Video or the “About Us” webpage that contained the Challenged Statements. (UMF 7-8.)

The general rule is that “an injunction may not issue unless the alleged misconduct is ongoing or likely to recur.” (Madrid v. Perot Systems Corp., supra, 130 Cal.App.4th at p. 464.) Despite Multiversal’s contentions to the contrary, the party seeking injunctive relief has the burden to show that past violations will probably recur. (See People v. Toomey, supra, 157 Cal.App.3d at p. 20 [“Injunctive relief has no application to wrongs which have been completed absent a showing that past violations will probably recur.”] [internal citations omitted].)

Multiversal contends that the republishing of the Challenged Statements is likely to occur in the future because 1) Yelp has refused to agree to an injunction enjoining it from ever publishing them again (PDF 21), 2) Yelp’s Engineering Manager, Jim Blomo, testified that the 2010 Video could be published again if there was manager and PR approval from Yelp (Response to UMF 7), and 3) the 2010 Video has not been destroyed. Multiversal also disputes that Vince Sollitto has the authority to bind Yelp to the asserted promise that Yelp will not republish the 2010 Video or the “About Us” webpage that contained the Challenged Statements. (Response to UMF 8.)

Yelp asserts that there is no physical copy of the 2010 Video to destroy. (Motion, p. 8: 11-12.) Additionally, in light of the fact that the 2010 Video was posted on the web in digital form, the Court finds that the existence of the 2010 Video does not suggest that it is likely to be re-posted. Similarly, that Yelp has refused to agree to an injunction and that Mr. Blomo testified that multiple levels of approval would be required to re-post the 2010 Video do not militate in favor of a finding that Yelp is likely to re-publish the Challenged Statements. As to the question of Mr. Sollitto’s authority to bind Yelp, Corporations Code section 208, subdivision (b) binds an officer’s actions to the corporation if the officer acts “within the scope of the authority, actual or apparent, conferred by the board or within the agency power of the officer executing it….” (Corp. Code, § 208(b).) The Court notes that the Yelp Bylaws indicate that an officer of Yelp (including a Vice President) has “agency power” to bind the corporation by any contract or engagement. (Jampol Decl., Ex. F [Sollitto Decl.], Ex. A, p. 18 (located midpage), § 33.) Multiversal has not proffered any evidence suggesting that Mr. Sollitto is acting outside of the scope of his authority in declaring that Yelp will not republish the Challenged Statements. Accordingly, the Court finds that Multiversal has failed to shoulder its burden of showing that the offending conduct is likely to recur.

On the other hand, Multiversal does submit evidence that the wrongful conduct is ongoing, in the form of testimony from its expert that the message conveyed by the 2013 Video is the same as that of the 2010 Video. (PDF 15.) Yelp argues that “[t]he Survey did not – and cannot – determine the truth or falsity of the Challenged Statements or the New Statements.” (Reply, p. 12: 21-22.) That may be so, but the standard for an injunction pursuant to Business & Professions Code sections 17200 and 17500 et seq. is whether “members of the public are likely to be deceived.” (Day v. AT & T Corp. (1998) 63 Cal.App.4th 325, 331-332.) With that in mind, the Court finds that a triable issue of fact exists as to whether the New Statements are sufficiently similar in meaning or in substance to the Challenged Statements as to constitute a continuing violation. This conclusion, the Court notes, is in accord with the general rule that courts may issue an injunction even as to discontinued acts if the conduct is ongoing. (See People v. Toomey (1984) 157 Cal.App.3d 1, 20 [finding that the fact that defendant had ceased selling offending coupons did not bar injunctive relief where he was selling other similarly offending coupons].) Although Toomey was decided before the UCL amended its standing requirements, the general principle still holds. (See, e.g., Madrid v. Perot Systems Corp. (2005) 130 Cal.App.4th 440, 465 [concluding that the current UCL has not altered the nature of injunctive relief].) Moreover, “many courts have rejected arguments against injunctive relief where defendants changed their practices only in response to being sued.” (Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 133 [citation omitted].) Here, Multiversal submits evidence that Yelp replaced the 2010 Video only after litigation had been pending for more than a year and a half. (Response to UMF 6.)

Based on the foregoing, the Court finds that Multiversal has raised a triable issue of material fact as to an essential element of the two causes of action (the availability of injunctive relief), and therefore, summary judgment is denied.

Conclusion

Based on the foregoing, Yelp’s motion for summary judgment, or in the alternative, summary adjudication is denied in its entirety.

DATED: June 14, 2018 ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court

[1] Rather than list the entirety of the lengthy interrogatory response, the Court will categorize the discrete statements/requests for easier reference.

[2] In the FAC, Multiversal seeks, in its prayer for relief, to enjoin “any statement concerning the fairness, trustworthiness or unbiased nature of any filtering system of the Yelp website, that is untrue or misleading, and that is known, or by the exercise of reasonable care should be known, to be untrue.” (See FAC, Prayer at ¶ 2.)